Start here if you're new
what it is
Centene gets paid by the government to manage health insurance for people on Medicaid, Medicare, and other subsidized plans.
how it gets paid
Last year Centene made $174.6B in revenue. Medicaid was the main engine at $108.3B, or 62% of sales.
why it's growing
Revenue grew 20.0% last year. Revenue hit $129.9B, up 189% vs. prior year, but earnings still missed.
what just happened
Centene's latest quarter printed -$1.19 in EPS, a miss versus the -$1.14 estimate.
At a glance
B+ balance sheet — decent shape, but not bulletproof
75/100 earnings predictability — reasonably predictable
19.5x trailing p/e — priced about right
5.5% return on capital — nothing to write home about
xvary composite: 72/100 — average
What they do
Centene gets paid by the government to manage health insurance for people on Medicaid, Medicare, and other subsidized plans.
Centene wins where scale and bureaucracy meet. It serves government-sponsored programs for under-insured people, and that takes local contracts, compliance muscle, and 60,500 employees. If your state already uses Centene, switching is painful because the paperwork, provider networks, and care systems all have to move at once.
How they make money
$174.6B
annual revenue · their business grew +20.0% last year
Medicaid
$108.3B
Medicare
$33.2B
Marketplace
$19.2B
Commercial
$8.7B
Specialty Services
$5.2B
The products that matter
administers government health plans
Medicaid & Medicare Services
$174.6B revenue
it is the entire $174.6B business on this snapshot, and it operates with a 0.8% net margin. That tells you scale is real, but profitability is fragile.
core
marketplace margin recovery
Ambetter Marketplace
profitability focus
management called out significant marketplace margin recovery as a driver behind adjusted earnings above $3.00 per share. That is the part of the story you need to see continue.
watch margins
cost and network management
Clinical Programs & Network Optimization
cost-savings lever
Centene said new clinical programs, rate advocacy, and network work are part of the path back to earnings growth. When your margin is 0.8%, small operational wins matter more than they sound.
execution bet
Key numbers
49%
debt load
Long-term debt equals 49% of capital. Plain English: almost half the company is financed with debt. So what: a low-margin business has less room for mistakes.
1.0%
net margin
For every $100 Centene collects, it keeps about $1 in profit. That is why tiny cost swings matter so much.
$174.6B
annual revenue
The scale is huge. The problem is that huge scale with tiny margins can still produce ugly earnings volatility.
5.5%
return on capital
Return on capital means profit earned on the money tied up in the business. Plain English: Centene turns $100 invested into $5.50 of operating profit. So what: that is okay, not special.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 45 / 100
- long-term debt $17.4B (49% of capital)
- net profit margin 1.0% — keeps 1 cents of every dollar in revenue
- return on equity 9% — $0.09 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in CNC 3 years ago → it's now worth $5,550.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
Centene's latest quarter printed -$1.19 in EPS, a miss versus the -$1.14 estimate.
Revenue hit $129.9B, up 189% vs. prior year, but earnings still missed. The quiet part out loud is simple: this business is so margin-thin that big revenue does not guarantee clean profits.
$129.9B
revenue
-$1.19
eps
9.0%
gross margin
the number that mattered
The key number was the 4.39% EPS miss, because a company with 1.0% net margins does not get many harmless misses.
-
centene closed out a tumultuous 2025 reasonably well.
-
fourth-quarter results featured improved profitability within the medicaid segment, as its health benefits ratio (hbr) exited the quarter at 93.0%.this represented a 40-basis-point sequential improvement and cumulative 190-basis-point improvement from the june interim, illustrating a strengthening in the trajectory of the company’s largest business. meantime, underlying medical cost and enrollment trends within marketplace and across the medicare segment are meeting expectations, laying the foundation for improved results in 2026. although the december interim included an adjusted loss per share of $1.19, the full-year tally of $2.08 was considerably higher than centene’s downwardly revised projection of $1.75 a share that accompanied weak june-period results.
-
leadership provided a somewhat encouraging outlook for 2026.
-
it now projects adjusted earnings in excess of $3.00 per share, representing greater than 40% vs. prior year recovery.morestable medicaid margins, as well as significant marketplace margin recovery, are key components of this forecast. as well, centene is focused on optimizing its networks for cost savings through the implementation of new and enhanced clinical programs, rate advocacy, and collaboration with state partners on program reform. centene remains focused on supporting margin expansion and generating profitability in its ambetter health marketplace business. improved levels of paid membership in a post-eaptc (enhanced advance premium tax credits) environment provide better risk-adjustment visibility for the efficiently streamlined segment.
-
marketplace now comprises roughly 3.5 million members, down from 5.5 million in december.
source: company earnings report, 2026
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What could go wrong
the top threat is medicaid and marketplace margin pressure.
med
medical costs outrun premium economics
Centene already runs at a 0.8% net margin on $174.6B in revenue. When claims costs rise faster than reimbursement, the income statement has almost no buffer.
That is how you get 20.0% revenue growth and still print -$0.35 of quarterly EPS. The stock can survive slow growth. It cannot survive repeated margin misses.
med
state and federal program changes
This business is tied to government-sponsored healthcare programs. Rate decisions, eligibility reviews, and reimbursement changes can move the model fast because policy is not a side issue here — it is the business.
If state partners get tougher or enrollment rolls tighten, both revenue and margin can move the wrong way at the same time.
med
turnaround expectations get ahead of reality
The company is guiding to adjusted earnings above $3.00 per share after a quarter with negative EPS. That sets up a recovery narrative the market will measure quarter by quarter.
At 19.5x trailing earnings, you are not paying a distressed multiple. If recovery slips, the rerating case slips with it.
Centene's risk picture is concentrated: 100% of the $174.6B revenue base depends on getting government-program pricing, member mix, and medical cost trends roughly right.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
watch whether net margin gets meaningfully above 0.8%
Scale is not the issue. Margin is. If this number stays stuck near 1%, the bull case stays on life support.
trend
track marketplace and medicaid margin recovery
Management said those two areas are driving the earnings rebound. That makes them the first place to look for proof.
calendar
next earnings need to confirm the >$3.00 adjusted EPS path
One guide is a promise. Two clean quarters start to look like evidence.
risk
policy and redetermination headlines still matter
When your business is built on public programs, reimbursement and eligibility changes are operating results in disguise.
Analyst rankings
short-term outlook
top 5%
momentum score 1 — the highest rating. in human-speak, analysts think the rebound still has legs over the next 12 months.
risk profile
average
stability score 3 — this is not a bunker stock, but it is not chaos either. The business model is stable; the margins are not.
chart momentum
average
technical score 3 — no dramatic signal here. The chart is behaving more like a work-in-progress than a breakout.
earnings predictability
75 / 100
guidance has been reasonably readable, which helps when you are underwriting a recovery instead of a pristine compounder.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 480 buyers vs. 430 sellers in 3q2025. total institutional holdings: 0.5B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$27
$75
$41
current price
$51
target midpoint · +26% from current · 3-5yr high: $55 (+35% · 8% ann'l return)
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